Imagine you’re importing a €10 smartphone case to Europe. Currently, there is no need to pay any customs fees or taxes, so the customer would still only pay €10. As of the 1st of July 2021, the same smartphone case arriving in Belgium, for example, will be subject to a customs fee of €15. 21% VAT will then be surcharged on the total amount (€5.25). VAT rates and customs fees vary depending on the destination country.
In this case, the customer will be charged €30.25 for the same smartphone case. If you are an IOSS supplier, however, your customer will only have to pay the VAT surcharge. (21% VAT on €10, i.e. €2.10)